India's ambition to become a global manufacturing hub, particularly for electronics, has received a significant boost from Apple's increased investment and production in the country. The tech giant's move to diversify its supply chain away from China has positioned India as a key player in the global electronics landscape. However, this progress could face headwinds if a potential US-China trade deal eases tensions and reduces the impetus for companies to shift production away from China.

Apple's commitment to India is evident in its expanding production capacity and increasing export volumes. In the fiscal year 2025, Apple assembled approximately $22 billion worth of iPhones in India, a 60% increase from the previous year. While this represents a substantial rise, it still accounts for only about 20% of the world's iPhone production, indicating significant room for further growth. CEO Tim Cook recently stated that the majority of iPhones sold in the US are expected to originate from India by June 2025. Apple is reportedly aiming to shift all production for US-bound iPhones from China to India by the end of 2026, a move that would require a doubling of its current output from the South Asian nation.

This expansion is being facilitated by partnerships with key manufacturers like Foxconn and the Tata Group, which are scaling up their operations in India. Foxconn is establishing a new plant in Bengaluru that is expected to become its second-largest globally, creating approximately 40,000 direct jobs. Tata Electronics has also entered the fray, starting iPhone production at a new plant in Tamil Nadu. These investments highlight the growing confidence in India's manufacturing capabilities and its potential to support Apple's ambitious production targets.

The Indian government has played a crucial role in attracting Apple and other electronics manufacturers through various incentive schemes, most notably the Production Linked Incentive (PLI) scheme. This scheme provides financial incentives to companies based on their production targets, encouraging increased investment and output. The government has also launched the Electronics Component Manufacturing Scheme to boost local component manufacturing, aiming to reduce import dependence and create a more comprehensive domestic electronics ecosystem. Union IT Minister Ashwini Vaishnaw has stated that electronics manufacturing in India is currently around $120 billion, with a target to grow it to $500 billion in the coming years.

Despite these positive developments, challenges remain. Infrastructure bottlenecks, labor inefficiencies, and regulatory hurdles have been cited as potential obstacles to Apple's expansion plans. Cultural differences, such as differing labor laws regarding shift lengths, have also posed some difficulties. Moreover, there have been instances of the Indian government blocking Chinese suppliers from investing in India, reflecting ongoing geopolitical tensions.

The biggest threat to Apple's Indian manufacturing ambitions could come from a potential detente between the US and China. Recently, the United States and China reached a 90-day tariff truce, aimed at de-escalating their long-standing trade dispute. This development has prompted speculation about its impact on Apple's strategy and India's growing role in global electronics manufacturing. If trade tensions between the two economic superpowers ease significantly, the pressure on Apple to diversify its supply chain away from China could diminish.

However, even with a potential US-China trade deal, India may still retain some advantages. Smartphones exported from India to the US currently enjoy zero duty, offering a significant edge over China, which faces tariffs related to fentanyl enforcement policies. Moreover, Apple's shift away from China is driven by a broader need to diversify supply chains and reduce dependency on a single country, a strategy that is likely to persist regardless of short-term trade negotiations.

Ultimately, the extent to which Apple's Indian manufacturing plans are affected by a US-China trade deal will depend on the specific terms of the agreement and the broader geopolitical landscape. While a deal could potentially slow down the pace of expansion, India's growing manufacturing capabilities, government support, and strategic importance as a market are likely to ensure its continued role in Apple's global supply chain.